The Canada Recovery Benefit and You

There is no sugar coating it, so we’ll just come out and say what you probably already know. CERB, the federal emergency response benefit enacted in March, is over.

Even though only about half of the Canadians who found themselves jobless during the first lockdown are employed again, the federal government is ending CERB and replacing it with some new benefits. The one that most closely resembles CERB is the Canada Recovery Benefit (CRB).

We’ve got all the pertinent deets below.

What is the Canada Recovery Benefit?

The CRB is the most similar to CERB. It’s essentially a direct replacement, but only if you’re ineligible for the new EI. Payments are $500 per week for up to 26 weeks. The payments are biweekly, and are considered taxable income. And like CERB, you apply for CRB through the CRA portal, and reapply every two weeks. You can sign up to have the payments directly deposited into your account.

Are you eligible for CRB?

The CRA website is set up with a checklist for a detailed eligibility overview, but here’s the gist:

Basically, if you’ve filed your taxes and you’ve lost 50% or more of your income and worked fewer than 120 insurable hours in the past year, you’re eligible. Insurable hours are, essentially, hours worked for an employer, usually one who deducts EI from your pay. This means that CRB is a benefit that works for both self-employed people/gig workers and people out of work from regular employment—which is, frankly, great!

So, if you’re a gig worker, independent contractor, or otherwise self-employed, and are either not working due to COVID-19 or have lost half or more of what you used to make in a week because of the pandemic, this benefit is perfect for you.

"The CRB is the most similar to CERB. It’s essentially a direct replacement, but only if you’re ineligible for the new EI."

How to apply

Just like with CERB, CRB is set up so that you reapply for it on an ongoing basis as you need the support. Applications open up every other Monday, and you apply for the two week period that just passed. The benefit will last for 26 weeks, or 13 periods, and the first one opened for applications on October 12.

It’s pretty simple to apply through the CRA My Account portal. While you’re in there, be sure to set up direct deposit, if you haven’t done so already. Waiting for an old-fashioned paper cheque in the mail is stressful as heck, especially during rent week. Why put that on yourself? The CRA makes it pretty simple to set up direct deposit and has a list of trusted financial institutions you can choose from, including, ahem, KOHO.

If you have the government directly deposit the funds into your KOHO account, you’ll be automatically registered to earn interest* on those payments. In addition to the regular cash back, that means using KOHO for your CRB payments will give your budget even more wiggle room. Just saying!

You can still freelance and collect CRB

Okay, so first some tax-time info: The CRB is taxable income, and if you collect for all 26 weeks of the program that represents a taxable income of $13,000. The CRA will automatically withhold a 10% tax off that, so each payment comes out to $900, every two weeks. You might end up paying a little more or a little less tax than that at tax time, of course.

But! You can still work while collecting CRB, so if you’re able to pick up a few gigs or contracts, you absolutely should. The only catch is if you report an annual income of $38,000 or more, you’ll have to pay half of what you collected in CRB payments back at tax time. For what it’s worth, that annual income figure doesn’t include CRB payments, but it does include CERB and similar payments you may have collected. Why? No idea, the government is fickle like that.

"Applications open up every other Monday, and you apply for the two week period that just passed."

Using KOHO to collect CRB

As you put in your application to CRB, it’s really smart to set up direct deposit through the CRA’s portal. (Luckily, it’s also super easy!) It makes the wait times shorter, which is especially important given that you most likely have enough to worry about these days.

Setting up the direct deposits to go directly into your KOHO account is like, double smart. Yes, we’re a bit biased, but it really does make lots of sense. Using KOHO can help you break your credit card reliance, and is a useful way to track spending and even save a little money—the average KOHO user saves 7% of whatever they put in their account.

You’ll also be ready to collect interest* on whatever is in your KOHO account, helping you grow and stretch the payments.

A TL;DR checklist:

o   Apply for CRB on October 12 through the CRA My Account Portal.

o   Set up direct deposit to your KOHO account on the CRA website.

o   Spend, save, and earn cash back.

o   Wash your hands and keep cosy.

*Interest rates are per year, calculated daily, paid monthly, and can change at any time without notice.